It was the sixth consecutive year that the industry has seen an increase in the demand for vinyl.

"Vinyl is selling really well. It actually took over CD sales in the last half of last year for us," says Matt Huddy, manager of Sydney's Red Eye Records.

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2016 was the sixth consecutive year that the industry has seen an increase in the demand for vinyl.Credit:Louise Kennerley

Huddy says Red Eye's biggest sellers on vinyl cover all musical genres with a particular interest on back catalogue releases in classic rock and hip-hop.

"Last year the biggest seller was David Bowie's Black Star which obviously had a bit to do with his passing. Things like Dark Side of the Moon [Pink Floyd)]we'll sell multiple copies a week, same with Fleetwood Mac's Rumours, Beatles albums," he said.

But sales are not just confined to nostalgic Baby Boomers. There's one current Australian psych-rock band that sells particularly well in the format.

"King Gizzard and the Lizard Wizard that goes really, really well. Any new album of theirs we can sell quite a lot of copies and they have three albums a year," he said.

"We get kids as young as 12 in with their parents. They've dug the turntable out of the garage and they want Taylor Swift on vinyl."

It follows a growing trend around the world. In Britain, vinyl sales for 2016 rose 53 per cent, according to the British Phonographic Industry.

In the US, a Nielsen Music report showed vinyl sales accounted for 11 per cent of total physical album sales in 2016, the 11th consecutive annual rise for vinyl.

The question is, why are consumers turning to a musical format that had its heyday in 1981 when total vinyl album sales surpassed 1 billion?

"I think a lot of people got turned off digital sound-wise and people still want to own things. They want to be able to hold something. There's a bit of coolness to it at the moment as well," Huddy said.

CD sales still beat vinyl though, accounting for a total of $87.2 million in sales Australia last year. However, this dropped from $110.5 million in 2015.

"People see CDs as daggy now which we hate because we still love CDs. There's definitely that vibe about CDs," Huddy said.

Overall, Australian music sales rose 5.5 per cent to $352.2 million last year, largely due to the rise in streaming which has become the dominant music consumption format in the country.

Sales from streaming nearly doubled to $135.5 million while digital downloads dropped by a fifth to $105 million.

Overall, digital sales now account for nearly three quarters of the total market.